FX never trades as if it owns the future; it’s a market built for the here and now, wired into immediacy like a jazz drummer keeping time. The Lisa Cook saga may be a big drumroll for the political class, but for FX, it’s background noise, like a cymbal brushed faintly in the distance.
The firing sits on a long-dated horizon, where the real storm might only arrive once Powell exits stage left in 2026. Until then, the ’s score is written not in Washington’s intrigue but in Friday’s print and the September data cycle.
Think of it like two clocks running at different speeds. The front end of the curve is the impatient clock, ticking loudly, marking only the Fed funds path. It doesn’t care about 2026 or court battles or Supreme Court whispers; it’s locked on where rates go next, within the next month or three. The back end, by contrast, is the philosopher’s clock — slower, heavier, one that broods about how much damage might be done to the Fed’s credibility, how easily independence might be chipped away.
If the Fed is pressured into too deeply, too quickly, that clock starts ringing about risk long after the headlines fade. For bonds, that distinction matters. The back end broods like a philosopher over second-round inflation risks and the long-term scars of political meddling. But FX isn’t wired that way — the market doesn’t get paid to gaze at the horizon.. Currencies are slavish to where the policy rate ticks over in 3 months’ time , not where credibility might fray in 2026.
That’s why we’re not rushing to unload more dollars just yet. The market needs confirmation — Friday’s is one of those keen litmus tests
Traders have no appetite, at least this one doesn’t, for wasting bandwidth on distant legal jousting; they’re focused on Friday’s , the next real marker that could force a repricing of near-term rates. FX desks are like sprinters waiting for the starting gun, coiled up at the line, barely blinking at the crowd noise in the stands.
And here’s where the tape gets more interesting: the dollar’s main rival doesn’t have the luxury of riding Powell’s dovish stance; the euro is grappling with politics closer to home. Paris, not Washington, is the true source of indigestion this week. Bayrou’s confidence vote has set France on edge, and OAT–Bund spreads creeping toward 80bps are no longer a quirky subplot — they’re a crack forming in the Eurozone’s veneer. If those cracks widen to the point where French yields threaten to overtake Italy’s, it’s no longer “just France.” It becomes a fault line for the single currency, the kind of tectonic risk that FX traders can’t ignore.
That’s why the euro is pinned between the guardrails of 1.1575 and 1.1675. These levels aren’t just technical markers, they’re psychological fences — the paddock where traders wait for data and headlines to force their next gallop. A break below 1.1575 tells the story of Europe’s weak flank, a bleeding of politics into sentiment that would send lower on more than just charts. A push through 1.1675, on the other hand, would signal the market leaning back into Powell’s dovish breeze, reassured by a softer PCE print and willing to give the euro a reprieve despite the French smoke.
So FX sits in suspension, one eye on Friday’s inflation scorecard, the other on Paris. The dollar is not trading on distant constitutional debates or the fine print of Fed appointments. It’s trading like it always does: fast, tactical, living tick-to-tick. The philosopher’s musings about 2026 may shape the curve, but the currency market dances only to the music that’s playing now — and this week, the PCE drumbeat is the only rhythm that matters.
Nvidia: Riding the AI Freight Train, But China’s Signals Still Flash Yellow
Nvidia (NASDAQ:) is still the engine pulling the AI express, rattling down the tracks at full speed with carriages stacked to the roof with revenue. This was no exception — $46.7bn in sales, a 56% year-on-year surge, edging past Wall Street’s estimates. Net income ballooned nearly 60% to $26.4bn. These aren’t just healthy numbers; they’re the kind of oversized returns you get when a single company becomes the arms dealer in a global tech arms race.
Yet, as every trader knows, even the fastest train feels the bumps. Despite the beat, Nvidia stock sagged 3% after hours. Why? Because the China carriage is wobbling. Washington’s export brakes on the H20 chip, designed specifically for Beijing, forced Nvidia into a Faustian bargain: resume sales, but hand Uncle Sam 15% of the take.
That deal has yet to be codified, leaving $2–5bn in potential China revenue stuck in a siding. Investors were hoping those dollars would already be boarding this quarter’s train; instead, they’re still waiting at the platform.
In the meantime, Jensen Huang is preaching that the AI boom is nowhere near its peak. He points to hyperscalers — Google (NASDAQ:), Amazon (NASDAQ:), Microsoft (NASDAQ:), Meta (NASDAQ:) — doubling their annual capex to a dizzying $600bn.
His metaphor: “AI factories” mushrooming across the globe. My trader lens? This is less a mushroom cloud and more a refinery fire — capital being burned at a blistering pace to keep the AI turbines running. For now, Nvidia sells the shovels in this gold rush, and the buyers keep lining up.
Still, the law of large numbers lurks. Growth today looks robust, but it’s slower than the vertiginous take-off from two years back. The H20 drama with China adds another layer of uncertainty — Beijing is actively nudging domestic firms away from Nvidia’s kit, while Washington is playing gatekeeper with every export. That makes the Middle Kingdom less a steady revenue stream and more a geopolitical minefield.
The product pipeline remains a saving grace. Blackwell Ultra is ramping at “extraordinary” demand, even after technical hiccups. Next year, Nvidia will roll out Vera Rubin — the next-gen chip meant to keep the AI moat wide. Think of Rubin as fresh artillery being wheeled onto the battlefield just as competitors like AMD start firing back.
The $60bn in authorised buybacks is a signal too — management knows volatility will keep this tape lively. Nvidia has already tacked on 35% this year, yet traders learned last week how fragile that AI premium can be when sentiment wobbles. This is not a “buy and hold forever” ticket. It’s a stock that trades like an Olympic sprinter — breathtaking speed, but every muscle twitch is under scrutiny.
Bottom line: Nvidia is still the undisputed conductor of the AI symphony, but the China section is playing off-beat. The bullish crescendo continues for now, powered by insatiable hyperscaler demand, but traders should keep an eye on the sheet music — Washington’s rules, Beijing’s pushback, and the inevitable fatigue of markets that have already priced perfection.